The latest ASB Housing Confidence survey, released today says there has been a big change in findings. It shows that the number of people who expect rate increases is down from 67% to a net 36%.
“Those surveyed appear to have quickly interpreted news of the wider economic slowdown, as well as a cooling in the housing market, as a reduced need for higher interest rates,” ASB Bank says.
While the Reserve Bank left rates unchanged at its latest official cash rate review last Thursday, it also gave a stern warning and said that no rate cuts are likely this year.
Since the announcement most the banks have increased some of their fixed rate terms by around 20 basis points, and the expectation is that there are further increases to come.
In the two year market, the mainstream banks have put their rates up to either 7.90% or 7.95%. However BNZ is still the lowest offering its Classic loan at 7.60% and Westpac is the only big bank still to move – offering two years at 7.70%.
These increases are the first since price cutting started in January.
Bank of New Zealand, which has led the price war has cut its advertised two-year fixed rate from 8.25% in December to as low as 7.50% in early April. It is currently 7.60%. ASB's two-year fixed rate for mortgages has declined from 8.30% to 7.70%, and today has moved up to 7.90%.
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